The average growth rate for house prices in Australia is moderating, but prices are still growing – “exactly what it’s supposed to do at this point in the cycle,” says property analyst John McGrath from Switzer Daily.


“This period of moderate growth will go on for a while and that’s healthy,” he says. “After boom conditions (in some markets), you want to see some moderation in prices without major falls.”


According to CoreLogic RP Data, Sydney house prices rose 4.5% in the first four months of the year, with unit prices growing 4.2%. Melbourne house prices rose 3.7%. Only two capital cities—Perth and Darwin—experienced a fall in house prices, but the decline was quite small.


The 0.25% reduction in the official interest rate also presented more opportunities for both investors and owner-occupiers, as it translates into to low-cost repayments and the possibility of extra repayments to help pay off a mortgage in a shorter period of time.


But McGrath also issues a word of caution regarding the 1.75% cash rate. “Official rate cuts mean the Reserve Bank is concerned about the economy,” he says. “The most important consideration is your employment. As long as you’re employed, you can make repayments. If your job is secure and you’re doing well, then this is an absolute ‘golden era’ for financing your next property purchase.”